The National Company Law Appellate Tribunal (NCLAT) has quashed the liquidation order of Incab Industries, earlier passed by National Company Law Tribunal's (NCLT) Calcutta bench.
The double bench of the New Delhi-based NCLAT comprising Justice A.I.S. Cheema and V. P. Singh, member (Technical), while reading out the 82-page verdict over a video conference on Friday, rejected the company's liquidation and declared the committee of creditors (CoC) as invalid.
The statutory body which helps in revival of sick industries also ordered the replacement of Shashi Agarwal, the Resolution Professional _ who was appointed to conduct the corporate insolvency resolution process _ and appoint a new RP by June 9. The NCLAT double bench also sought action against the resolution professional and referred the matter to the Insolvency and Bankruptcy Board of India ( IBBI) .
The final order said Shashi Agarwal shall immediately hand over charge to the new Resolution Professional as the adjudicating authority (ie, Calcutta bench of NCLT )
may appoint.
The NCLAT order also rejected outright claims of Kamla Mills and Fasqua Investment, the two private entities owned by RR Kabels, one of the earlier bidders of the ailing company.
"The new Resolution Professional will collate all the claims submitted by creditors before the earlier Resolution Professional and, depending on the claims admitted from CoC excluding Kamla Mills Private Limited and Fasqua Investment Private Limited and proceed further with the Corporate Insolvency Resolution Procesd (CIRP), " stated the NCLAT order.
Senior advocate Akhilesh Srivastava who is fighting the case in favour of employees said, "We are happy with the NCLAT order. It is a victory for the employees. Things will start afresh at the NCLT. We have always opposed the liquidation move. Now, fresh efforts will be made to revive the company."
S. K. Mohanty, a Supreme Court lawyer based in New Delhi who is also fighting the case in favour of the employees, said, "We welcome the NCLAT verdict. It has set-aside the NCLT liquidation order of the company passed on February 7 last year. All parties have been asked to appear before NCLT - Calcutta bench on June 9."
Notably, the Calcutta bench of NCLT on February 7, 2020 had ordered dissolution of ailing Incab Industries under The Insolvency and Bankruptcy Code, 2016. The liquidation order came as a major blow to the workers in Jamshedpur as well as the union operating here and in Calcutta, where Incab has its head office.
Incab's Jamshedpur plant currently has a strength of around 900-odd employees.
In the mid-1990s, Malaysian promoter Leader Universal Berhad Cables took over the firm. But, the company started suffering losses and slid deeper in the red. As it was suffering losses Incab was referred to the BIFR in 1999, a year before Jharkhand was carved out of Bihar.Since then the employees are deprived of their monthly salary and other benefits.
Aloke Sen, a senior union functionary of Incab Industries based in Calcutta said that they will again approach Tata Steel with a request to revive the ailing company.
Tata Steel was also one of the bidders of the company. It's bid was declared as the best by the erstwhile Board for Industrial and Fnancial Reconstruction (BIFR). But, the steel major could not take over the ailing Incab because of various legal issues.
